The maker of the Kona Brewing Co. line of beers has reached a deal to settle class action claims that the company misled consumers to believe that its Hawaii-themed brews were made in the Aloha State when they were actually brewed in the continental U.S.
Plaintiffs lawyers at Faruqi & Faruqi and the Wand Law Firm filed court papers Thursday indicating the Craft Brew Alliance Inc., or CBA, has agreed to list the actual brewing site or all locations where Kona beers are brewed on all consumer-facing packaging for a minimum of four years.
A mock-up of the new packaging for the brand’s Big Wave Golden Ale included in the exhibits attached to Thursday’s court filing lists Kona, Hawaii; Portland, Oregon; and Portsmouth, New Hampshire. As part of the proposed deal, the company has also agreed to refund consumers up to $20 if they have proof they purchased the Kona beers during the class period and up to $10 if they have no proof of purchase. The parties expect that there are about 7.8 million potential class members, but, given the possibility of fraudulent claims where no proof of purchase is presented, Kona has reserved the right to terminate the settlement if more than 1 million claims are submitted. Plaintiffs counsel are seeking $2.9 million in attorney fees, to be paid by CBA separate and apart from the settlement funds.
The proposed deal requires approval from U.S. District Judge Beth Labson Freeman of the Northern District of California, who has been overseeing the litigation.
Representatives from the company didn’t immediately respond to a request for comment Friday. Neither did Shook, Hardy & Bacon partner Tammy Webb, who has represented the brewer.
Plaintiffs filed suit against CBA in 2017, claiming that six- and 12-packs of Kona favorites, including Wailua Wheat Ale, Hanalei Island IPA, Castaway IPA, Lavaman Red Ale, Lemongrass Luau, Koko Brown and Pipeline Porter, came from breweries in Oregon, Washington, New Hampshire and Tennessee, rather than Hawaii’s Big Island. They claimed the company obscured that fact by only listing its Hawaii address on its multipacks, and including a map pinpointing Kona’s Big Island Brewery with an invitation to visit the brewery and pubs when in Hawaii. Freeman denied CBA’s motion to dismiss the lawsuit in September 2017, and certified a class of consumers in the case last October. The parties reached the settlement after two mediation sessions with Bruce Edwards of JAMS in San Francisco.
The lawsuit has come under criticism from the U.S. Chamber Institute for Legal Reform, which included it on its annual list of the year’s 10 “most ridiculous” lawsuits in 2018. But Benjamin Heikali of Faruqi & Faruqi said in an email Friday that the plaintiffs’ team considered the settlement an “excellent result” for the class. He also said that termination provision was not out of the ordinary. A similar termination provision was approved recently in a settlement in a case in the Northern District involving claims related to Canada Dry labels that said “Made with Real Ginger.”